New Delhi: Tata Steel Ltd’s acquisition of debt-laden Bhushan Steel Ltd, under the insolvency and bankruptcy code (IBC) framework, will reduce bank NPAs by Rs35,000 crore, financial services secretary Rajeev Kumar said on Monday.

“IBC transforming credit culture in NewIndia. About 35,000 crore reduction of NPAs of PSBs in Bhushan Steel case. Reduction of NPAs in individual PSBs range from about 500 crore to over 10,000 crore, he tweeted.

Last week, Tata Steel, through its subsidiary, completed the acquisition of controlling stake of 72.65% in Bhushan Steel for around Rs36,400 crore after emerging as the winning bidder in an insolvency auction.

According to Kumar, the Bhushan Steel acquisition will enable public sector banks to write back Rs7,500 crore of loans which were earlier classified as non-performing assets (NPAs).

“Future upside through over 6 crore equity shares acquired by PSBs. Decisive shift towards clean credit culture," Kumar tweeted.

Last week, interim finance minister Piyush Goyal had tweeted that the acquisition was a “historic breakthrough in resolving legacy issues of banks".

Bhushan Steel was among the 12 stressed assets the Reserve Bank of India had referred to the National Company Law Tribunal (NCLT) proceedings last year.

At 10.39 am, Tata Steel shares were trading 1.10% lower at Rs585.00 and Bhushan Steel shares were trading 4.88% higher at Rs29.00. Sensex was at 34774.16, 0.21% lower than previous close.

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